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June 27, 2013

BondDesk Sets All-Time Record for Muni Bond Trading Volume

Potential problems in the muni space aren’t an issue for retail platform

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The retail platform for municipal bond trading reported an all-time record of 11,590 municipal bond trades were done on Monday on the BondDesk ATS.

The record came on the heels of the largest three-day increase in yields since April 1987 and in the wake of last week’s Federal Reserve meeting.

John Bagley, president of BondDesk Trading, noted that interest in municipal bonds from retail investors has spiked over the past week along with the increase in yields.

“The municipal bond market has seen exceptionally large selling from institutions since the Fed meeting last Wednesday,” Bagley said in a statement. “This week, individual investors provided support for the market and drove yields down across the board by buying bonds at unprecedented levels. This buying was driven by an ability to buy 5.00% coupon bonds at par on a wide variety of quality municipal credits.”

The month-to-date fill rate for municipal bond orders placed against firm bids on the BondDesk ATS has been 98.8%, a remarkable fact given the market volatility during June, Bagley noted.

“While Bid Wanteds on our platform are nearing historically high levels above 10,000 per day, a sign of major selling pressure, there were almost five investor buys for every sell this past week, indicating that retail investors are jumping into the market to take advantage of higher rates,” he concluded.